Sustainable Development


DividerEarth Summit

Big Business Moves to Capture Earth Summit

Friends of the Earth

Investigations by Friends of the Earth reveal that the International Chamber of Commerce (ICC), the self-styled world business organisations, played a key role in the disbanding, earlier this year, of the United Nations Center on Transnational Corporations (UNCTC).

The UNCTC had been investigating the environmental performance of big business internationally and its damning findings undermine the ICC's attempts to convince the governments attending the Earth Summit, due to start in Rio de Janeiro next week, that "Progress on the environmental front can best be achieved by working with market forces rather than undue reliance on regulatory controls" (ICC press release, 12 March 1992).

Andrew Lees, on behalf of Friends of the Earth International, stated: "Big business is trying to capture the agenda at the Earth Summit so that it can pursue its own version sustainable development. The ICC is pressing for transnational companies to be allowed to set their voluntary standards for environmental protection internationally despite powerful evidence that regulation is what usually drives progress."

He continued: "The ICC wants free trade to take precedence over national measures to protect the environment."

The UNCTC's role

In 1990, the UNCTC was commissioned by the UN's Economic and Social Council (resolution 1990/71) "to investigate measures that would encourage and mobilise transnational corporations to protect and enhance the environment." The UNCTC responded by sending a questionnaire to 794 transnational corporations (TNCs) with annual sales over $1 billion.

Big business hostility to the UNCTC

In 1991 the UNCTC reported that "Both ICC and USCIB [the ICC's affiliate in the USA] have gone on record against UNCTC's work in the environmental field because its scope excludes national and local companies. Because the scope and effectiveness of UNCTC is limited, there is little value in the survey, and many companies are not responding to the survey." (statement made by the American Chemical Manufacturers Association, reported in Annex B: Methodological Note, Endnotes (page 49, para 3, C/4 - see note below). There is no obvious justification for this obstructive stance.

As TNCs control some 70% of world trade, their policies and practices are of key importance. Indeed, the UNCTC's focus on transnational corporations (TNCs) is consistent with both its remit and the task set for it by the UN Economic and Social Council. It would also be extremely difficult for the UNCTC to survey national and local companies, given the enormous number of them.

The ICC's agenda

In April 1991, the ICC launched its 8usiness Charter for Sustainable Development. The ICC's aim is to "establish the charter as the international benchmark statement on the business commitment to environmental protection", (ICC Annual Report 1991).

The fact that the companies which have endorsed the ICC's Business Charter include 30 of the top 50 in the Fortune 500 list, 50 companies out of the top 100, and 122 out of the 500 as a whole, makes the ICC's opposition to the UNCTC's survey even more difficult to understand.

It is worth noting, however, that one of the ICC's main objectives is "the promotion of self-regulation in business within a framework of law" and that it also "defends the interests of private enterprise in developed and developinq countries." (The ICC - What it is What it Does, ICC).

The Charter, according to the ICC, "provides a common, global basis for such improved environmental performance, minimizing competitive distortions', (The Business Charter For Sustainable Development: Model Questions and Answers, ICC).

The results of UNCTC's survey

In 1991 the UNCTC published the results of its survey - 20% (163) of the TNCs it contacted responded to its questionnaire.

The importance of regulation, as compared to voluntary measures, was demonstrated by the UNCTC's finding that 57% of the 163 TNCs identified home country legislation as the main factor influencing company-wide environmental policy and programmes.

The UNCTC's survey also revealed that "Less than half of the [163] firms have coordinated their environmental policies internationally or published a formal international environmental policy, despite a high expression of international environmental concern." It also showed that with regard to the international operations in developing countries, implementation and enforcement lagged behind policy development and training by transnational corporations."

Given these findings, it is not very surprising that the UNCTC's survey also revealed that:

  • only 19% of the 163 TNCs supported the creating and strengthening of national regulatory systems in developing countries.
  • only 9% of them supported the creating and strengthening of national inspection systems in developing countries.
  • only 3% monitored the disposal of hazardous waste by their developing country affiliates.
  • only 23% monitored their air emissions in developing countries.

Andrew Lees commented: "Friends of the Earth will continue to expose TNCs which are operating in developing countries to lower standards than those required in their home countries. They have nowhere to hide and they will lose both credibility and customers when we publicise their activities in their main markets."

Weasel words for double standards

The ICC states that the Charter has been "carefully worded to avoid unrealistic challenges or hidden traps." (The Business Charter For Sustainable Development: Model Questions and Answers, ICC).

The ICC states that its Charter applies "..the same environmental criteria internationally" When asked by Friends of the Earth whether this means that a firm should carry out the same environmental procedures and achieve the same environmental performance in any country of operation (letter from Friends of the Earth to the ICC, 10 December 1991), the ICC replied: "No, it means applying the same criteria, or considerations, deciding in each case what action to take to protect the environment. Ecological, technical, economic and other circumstances vary, so solutions may also vary." (The Business Charter For Sustainable Development: Model Questions and Answers).

NOTE: Benchmark Corporate Environmental Survey (1991), 4 volumes ST/CTC/SER. C/l, C/2, C/3 and C/4, United Nations Centre on Transnational Corporations, United Nations, New York.

Source: Friends of the Earth, 28 May 1992 Press Release.